NNPC and CIOs sign pact to generate $500 billion in revenue…to produce 10 billion barrels of oil from five OMLs

The Nigerian National Petroleum Company (NNPC) Limited and the International Oil Companies (IOC) operating in Nigeria on Friday signed various agreements that would ensure the production of around 10 billion barrels of crude oil and generate more than $500 billion in revenue for all parties involved.
NNPC officials and their IOC counterparts including Shell, Chevron, Texaco, Sinopec, Sapetro, Esso Exploration and Production Nigeria Limited among others renewed their agreements in five Petroleum Mining Concessions (OMLs) which included OML 128, 130, 132, 133 and 138.
The agreements renewed by the parties were, among others, Production Sharing Contracts (PSCs) as well as Dispute Settlement Agreements (DRAs), at a signing ceremony held at NNPC’s Abuja headquarters.
Speaking at the event, Group Managing Director, National Petroleum Investment Management Services, Bala Wunti said, “Cumulatively, we expect to produce and monetize over 10 billion barrels of oil with these signatures we had today. today.
“And it will by no means yield meaningful revenue to all parties. We forecast over $500 billion in revenue for all stakeholders.
Earlier, Group Managing Director, NNPC, Mele Kyari explained that the Petroleum Industry Act 2021 gives NNPC the legal backing to renegotiate all its existing PSCs under the provisions of the new law within a year.
The PIA became law on August 16, 2021 after being signed into law the same day by President Muhammadu Buhari.
The PIA in Section 311(2) provides that new PSC agreements under new terms will be signed between NNPC Ltd as concessionaire and its contracted parties within one year of the signing of the PIA, giving as deadline August 15, 2022.
Kyari noted that this provision paved the way for resolving lingering disputes that have created investment uncertainty and stifled new investment in the country’s deep offshore assets.
To achieve this, he said NNPC has leveraged the near end of CSPs and parties’ interest in renewing CSPs as a bargaining chip by bringing entrepreneurs to work to trade the past for the future. .
“These renewed PSCs would offer several benefits such as improved long-term relationships with contractors, elimination of contractual ambiguities, particularly with respect to gas terms, the possibility of early renewal of contracts, between others,” he said.
Kyari added, “The signing of the new PSCs is a key milestone for NNPC Ltd which would ultimately unlock opportunities in Nigeria’s upstream sector.
“The execution of the PSCs will deepen the investment and development of Nigeria’s rich petroleum resources and ensure that NNPC Ltd’s triple mandate of ensuring energy availability, sustainability and accessibility is realized.
“Ultimately, the new PSCs will provide an influx of foreign direct investment, expanded access to affordable energy, job creation and socio-economic development.”